Dear readers, it is no surprise that the Singapore February 2024 Savings Bonds has an average return of 2.81% per annum for 10 years. This is down from the 3.07% per annum for 10-year average return for Jan 2024 Singapore Savings Bonds and from 3.40% per annum for 10-year average return Dec 2023 Singapore Savings Bonds.
The reason? Expectations that the US Federal Reserves will cut interest rates this year, following pause in the interest rate hike.
The 2.81% per annum interest rate was even lower than the 2.90% to 3% per annum interest rate for 10 years that I have expected. I believe the average 10-year interest rate will continue to trend lower this year, especially once interest rate cuts by the US Federal Reserves have materialised.
As for the next popular savings products, T-bills, the interest rate of current 6-month T-bill, BS24100F will be out later today. Recent tranches of 6-month T-bills have held steady at around 3.73% per annum for BS23125H, and 3.74% per annum for BS23124Z. While my tracking of interest rates for T-bills shows a non-liner, fluctuating trend, I believe soon, we will be noting a linear downtrend for interest rates of T-bills as well, in view of possible US interest rate cuts this year. I will expect a lower interest rate of BS24100F at possibly 3.50% per annum, which will only decrease for future tranches.
I have secured Singapore Savings Bonds where their 10-year interest rates were above 3% per annum and this has proven to be a good move given lower interest rates for the Savings Bonds now. In addition, I have always chosen Singapore Savings Bonds over T-bills notwithstanding higher interest rates of T-bills precisely because I would like to secure decent good interest rates over a longer period of time than higher interest rates just for a 6-month period.
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